Greek yogurt is a delicious dairy product that’s produced by taking regular yogu
ID: 1103729 • Letter: G
Question
Greek yogurt is a delicious dairy product that’s produced by taking regular yogurt and straining it to a delicious, protein-rich thickness. The thing is, though, all of that straining means that you’re straining something out of the yogurt. That something is more than water: it’s post-fermentation liquid called acid whey. For every three or four ounces of milk that enter a yogurt plant, one ounce of acid whey leaves. They can’t dump it in sewage systems or waterways, and at least one manufacturer actually pays local farmers to take the liquid whey away and do something with it.
Some creative uses for it: one local dairy farmer takes the whey, which is mostly water with some lactose (milk sugars), protein, and yogurt cultures, and mixes it up with his cows’ feed. It’s sort of full circle.
An even more exciting use for the farm requires a huge investment up front that most farmers don’t have the resources for. Anaerobic digesters are a sort of septic tank for cow poo. They take in a slurry of animal manure and acid whey and let it brew, releasing stinky gases that the digester converts into electricity. One upstate New York farmer’s digester produces enough electricity to run the farm and sell some back to the grid.
Adapted from Consumerist (May 2013)
Based on Extract 1, determine the type of market failure that arises (if any). Use the Extract to provide a justification for your choice
Explanation / Answer
Productive and allocative inefficiency, is the market failure as the farmers do not have enough medium and resource to turn the whey and make something productive (electricity) and Eco friendly( as they would get electricity naturally, without damaging anything)
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